Wells Enterprises, Interface Security price; Wells jumps; DuPont, Atlas, Oxford up next

By Paul Deckelman and Paul A. Harris

New York, Jan. 15 - The high-yield primary market continued to take something of a breather on Tuesday, pricing just a pair of new deals, as it did on Monday, with total issuance of a relatively modest $465 million. It was less than Monday's total and well off the busier pace seen last week.

Both of Tuesday's deals were regularly scheduled forward calendar offerings that priced after roadshows, rather than opportunistically timed drive-by deals as both of Monday's credits were.

Ice cream maker Wells Enterprises Inc. served up a $235 million offering of seven-year notes. Far from melting in the day's slightly softer aftermarket, the new bonds firmed smartly when they were freed to trade.

Interface Security Systems Holdings, Inc. and Interface Security Systems LLC did a slightly upsized $230 million of five-year secured notes. No immediate aftermarket levels were seen.

Traders said recent new deals were slightly off their initial post-pricing highs, including Monday's quickly shopped Regal Entertainment Group offering and last week's dual-tranche deal from Bombardier, Inc.

Away from the deals actually priced, syndicate sources heard price talk out on deals from DuPont Performance Coatings, Oxford Finance LLC and Atlas Energy Holdings Operating Co. LLC, all of which are expected to come to market on Wednesday.

Gibralter Industries, Inc. announced plans for a $240 million subordinated note deal.

Statistical market performance measures stayed mixed.

Wells at the tight end

The dollar-denominated high-yield primary saw a pair of off-the-run issuers complete single-tranche secured deals on Tuesday, raising a combined total of $465 million.

Wells Enterprises priced a $235 million issue of seven-year senior secured notes (B2/B+) at par to yield 6¾%.

The yield printed at the tight end of the 6¾% to 7% yield talk.

BMO was the left bookrunner. Wells Fargo was the joint bookrunner.

The Le Mars, Iowa-based ice cream maker plans to use the proceeds to refinance debt, as well as to fund a dividend and for general corporate purposes, including capital expenditures.

Interface Security upsizes

Interface Security Systems priced a slightly upsized $230 million issue of five-year senior secured notes (B3/B-) at par to yield 9¼%.

The yield printed at the tight end of the 9¼% to 9½% yield talk.

Imperial Capital was the bookrunner for the issue, which was upsized from $225 million.

Proceeds will be used to refinance debt and for general corporate purposes. Additional proceeds, resulting from the upsize, will also be used for general corporate purposes.

The issuer is an Earth City, Mo.-based provider of physical security and secured managed network services.

Cerved prices three-parter

The European high-yield market continued to generate news on Tuesday.

Italy's Cerved Group priced €780 million of high-yield notes in three tranches.

The deal featured a €250 million tranche of six-year senior secured floating-rate notes (B2/B), which priced at par to yield Euribor plus 537.5 basis points.

The Euribor spread came at the tight end of spread talk that had been set in the 550 bps area.

In addition, Cerved priced a €300 million tranche of seven-year senior secured fixed-rate notes (B2/B) at par to yield 6 3/8%.

The yield printed at the tight end of yield talk that had been set in the 6½% area.

The company also priced a €230 million tranche of eight-year senior subordinated notes (B3/CCC+) at par to yield 8%.

The yield printed at the tight end of the 8% to 8¼% yield talk.

All three tranche sizes came at their targeted amounts.

Global coordinator Credit Suisse will bill and deliver. Deutsche Bank was also a global coordinator.

HSBC, BNP Paribas, UniCredit, Banca IMI and Credit Agricole were the joint bookrunners.

Proceeds will be used to help fund the acquisition of Cerved by CVC Capital Partners Ltd. from Bain Capital.

DuPont sets talk

DuPont Performance Coatings set price talk for the re-sized dollar- and euro-denominated bond tranches of its leveraged buyout debt financing.

The downsized $750 million tranche of 8.25-year senior notes (Caa1) is talked to yield 7½% to 7¾%. The unsecured notes tranche was downsized from $1.1 billion.

The upsized €250 million tranche of eight-year senior secured notes (B1) is talked with a yield in the 5 7/8% area. The secured notes tranche was upsized from €230 million.

The books close at 10 a.m. ET on Wednesday, except for accounts on the West Coast of the United States, which have until 2 p.m. ET on Wednesday.

The deal is set to price thereafter.

Credit Suisse, Deutsche Bank, Citigroup, Barclays, UBS, Morgan Stanley, Jefferies and SMBC are the joint bookrunners.

Along with the resizing of the bond tranches, the euro-denominated first-lien term loan was upsized to €390 million from €150 million. The $2.3 billion size of the dollar-denominated first-lien term loan is unchanged.

Voyage Care sterling deal

Voyage Care Bondco plc also set price talk for its re-portioned two-part £270 million offering of notes on Tuesday.

An upsized £220 million tranche of five-year senior secured notes (expected ratings B1/B+/BB), callable in two years at par plus 75% of the coupon, is talked with a yield in the 6¾% area. The tranche was upsized from £210 million.

J.P. Morgan, Goldman Sachs, Royal Bank of Scotland, Commerzbank and Lloyds are joint bookrunners.

A downsized £50 million tranche of second-lien notes (expected ratings Caa1/CCC+/CCC+) is talked with an 11% coupon at 98.50.

The second-lien tranche, which is downsized from £62 million, is led by joint bookrunners Goldman Sachs and JPMorgan and is not being widely marketed, sources say.

Pricing is set for Wednesday.

The overall deal size was decreased by £2 million.

And Czech Republic-focused New World Resources talked its €275 million issue of eight-year notes to yield 8% to 8¼%.

Citigroup, Morgan Stanley, Goldman Sachs and Erste Bank are managing the deal, which is also set to price on Wednesday.

Talking the deals

Price talk also surfaced on dollar-denominated deals set to price Wednesday.

Atlas Energy Holdings and Atlas Resource Finance Corp. talked their $250 million offering of eight-year senior notes (Caa1/B-/) to yield 7½% to 7¾%.

J.P. Morgan, Citigroup, Wells Fargo, Deutsche Bank and Bank of America Merrill Lynch are the joint bookrunners.

And Oxford Finance and Oxford Co-Issuer Inc. talked their $200 million offering of five-year senior notes (/B/) to yield 7¼% to 7½%.

J.P. Morgan is the bookrunner.

Wells does well

When the new Wells Enterprises 6¾% notes due 2020 were freed for secondary dealings, that issue from the Le Mars, Iowa-based maker of Blue Bunny brand ice cream hopped solidly higher. Traders at two separate shops quoted them at 103½ bid, 104 offered, well up from their par issue price.

Interface initially unseen

Interface Security Systems' 9¼% senior secured notes due 2018 were not seen initially trading around, after the Earth City, Mo.-based provider of physical security and secure managed network services priced the offering at par.

Regal retreats a bit

A trader said that Monday's Regal Entertainment deal "didn't do that well" in Tuesday's trading, quoting the bonds going home at 100 3/8 bid, 100¾ offered.

The Knoxville, Tenn.-based movie theater operator had priced its quick-to-market $250 million deal at par on Monday, and the bonds got as good as 100¾ bid, 101 offered, or 100 7/8 bid, 101 1/8 offered later Monday.

A second trader saw them finishing on Tuesday at 100¼ bid, 100¾ offered, down 5/8 point from Monday's closing level.

Lear a little lower

Monday's other deal - from Southfield, Mich.-based automotive seating and electrical components manufacturer Lear Inc. - was also quoted a little off from the peak levels seen in Monday's initial aftermarket dealings.

A trader pegged those 4¾% notes due 2023 at 100½ bid, 101 offered, although he later amended that to 100¾ bid, 101 offered.

That was still off from the 101 bid, 101½ offered level at which the $500 million deal had traded up to late Monday, after pricing at par.

A second trader quoted the bonds on Tuesday going out at 100 7/8 bid, 101 1/8 offered, calling them off by 1/8 point.

"The market actually took a breather," the first trader said, "because some of the other stuff got a little weaker too, although not by much.

Bombardier backs off

For instance, he said, Bombardier's big two-part deal from last week "gave up about a quarter to three-eighths. Things were a little weaker."

He quoted the Montreal-based aircraft and railroad equipment maker's $1.25 billion of 6 1/8% notes due 2023 at 102½ bid, 102 7/8 offered, down from Monday's level at 103¼ bid, 103½ offered.

He also saw its $750 million of 4¼% notes due 2016 finishing at 102¾ bid, 103 offered, off from Monday's 103¼ bid, 103 3/8 offered.

That quick-to-market $2 billion deal - the biggest so far this year - priced last Wednesday, after having been upsized from an original $1 billion.

Both tranches priced at par, too late to trade that session, but moved above the 102 mark when they began trading around on Thursday and continued to firm after that.

NeuStar edges lower

NeuStar Inc.'s 4½% notes due 2023 were seen by a trader on Tuesday going out at 99½ bid, par offered.

That was down about ¾ of a point from the 100¼ bid, 100 5/8 offered, where he had located them late Monday.

The Sterling, Va.-based communications services company priced its $300 million scheduled-forward calendar offering at par on Friday, after which it firmed to around par bid, 100½ offered.

Market measures mixed

Statistical junk market performance indicators were mixed on the day for a third straight session on Tuesday.

The Markit Series 19 CDX North American High Yield index posted its first gain after two straight losses, edging up about 3/16 to finish at 102 1/8 bid, 102 3/8 offered. On Monday, it had lost 5/16 of a point.

The KDP High Yield Daily index, though, lost 1 basis point to end at 75.83, its second consecutive loss. It had been off by 7 bps on Monday.

But the index's yield tightened by 1 bp, to 5.5%. The yield had widened out on Monday by 2 bps, after having been unchanged for two prior sessions.

The widely followed Merrill Lynch U.S. High Yield Master II index suffered its first loss in 11 sessions on Tuesday, dropping by 0.068%, which wiped out Monday's 0.061% gain.

That dropped its year-to-date return to 1.301%, down from Monday's 1.37%, the new peak level for the year so far.

The index's yield to worst rose on Tuesday 5.749% from Monday's 5.726%, its low for 2013. Its spread to worst versus the comparable Treasury issues widened to 492 bps from 488 bps on Monday and from its tight level for the year so far of 485 bps, set this past Thursday.

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